Pe­ter D Nep­tune

Com­mon­wealth non-gov­ern­men­tal or­gan­i­sa­tions (NGOs) have lent their sup­port for a pro­pos­al from British Prime Min­is­ter Gor­don Brown for a fi­nan­cial trans­ac­tion tax (FTT) in sup­port of health and hu­man­i­tar­i­an projects across the globe. David Hill­man, di­rec­tor of Stamp Out Pover­ty, a glob­al hu­man­i­tar­i­an non-gov­ern­men­tal lob­by group, said the pro­posed tax has the po­ten­tial to fi­nance sev­er­al glob­al hu­man­i­tar­i­an funds that are strug­gling to reach their tar­gets for de­liv­er­ing ser­vice and drugs to achieve their mil­len­ni­um goals.

Speak­ing at a press con­fer­ence at the IFC Build­ing C, at the me­dia cen­tre of the Com­mon­wealth Heads of Gov­ern­ment Meet­ing (CHOGM) yes­ter­day, Hill­man urged Com­mon­wealth lead­ers to sup­port the fi­nan­cial trans­ac­tion tax, in­clud­ing a cur­ren­cy trans­ac­tion levy for health. Hill­man said the for­eign ex­change mar­ket amounts to tril­lions of US dol­lars dai­ly and ex­act­ing a tax of less than half of one per cent will be un­no­ticed by traders, yet make a sig­nif­i­cant dif­fer­ence to the stan­dard of life for dis­ad­van­taged and poor peo­ple world­wide. He said a 0.05 per cent tax could eas­i­ly raise US$20 bil­lion an­nu­al­ly for these spe­cial projects. Oth­er speak­ers in­clud­ed Dr John Fos­ter of the North South In­sti­tute (Cana­da) and Basil Williams, di­rec­tor HIV and Aids Al­liance Caribbean.

Tax to ben­e­fit poor

Hill­man said key bene­fac­tors of the funds will be UN­Aids and sev­er­al re­lat­ed funds seek­ing to de­liv­er med­ica­tion, food and hu­man­i­tar­i­an re­lief for poor and dis­ad­van­taged coun­tries. "This is a very ex­cit­ing time for us, with the break­through two weeks ago with the British Prime Min­is­ter and the Unit­ed King­dom gov­ern­ment open­ly com­ing out in sup­port of the fi­nan­cial trans­ac­tion tax af­ter years of ex­ten­sive lob­by­ing from civ­il so­ci­ety and NGO groups. "It has re­cent­ly come to our at­ten­tion that in­di­ca­tions from Num­ber 10 Down­ing Street–the Prime Min­is­ter's Of­fice–that they are propos­ing to use 50 per cent of the rev­enues to help pay for bank bailouts, while the oth­er half will be split be­tween in­ter­na­tion­al de­vel­op­ment funds and projects deal­ing with de­liv­er­ing health­care and cli­mate change. "These are ex­tra­or­di­nary times, the is­sue of FTTs or a cur­ren­cy trans­ac­tion levy (CTL)–some­times re­ferred in the me­dia as a To­bin tax–was not be­ing dis­cussed se­ri­ous­ly by world lead­ers a year ago," Hill­man said. "Due to the re­cent fi­nan­cial cri­sis, gov­ern­ments are no longer pre­pared to fall back to the 'so-called' wis­dom of banks, and there seem to be an end to 'no-go' ar­eas, such as tax­ing cur­ren­cy trans­ac­tions."

Fix­ing the fi­nan­cial sys­tem

Hill­man said se­ri­ous ques­tions were be­ing asked about the ac­tions and op­er­a­tions of the in­ter­na­tion­al bank­ing sys­tem and the at­ti­tudes of bank lead­ers. "The ap­proach was that the banks could get away with this be­cause all of so­ci­ety ap­pear to ben­e­fit from their ac­tions, and their 'if it's not broke, don't fix it' at­ti­tude– but the fi­nan­cial in­ter­na­tion­al sys­tem lit­er­al­ly be­came broke, and it needs to be fixed," he said. "This chang­ing ap­proach by world lead­ers first man­i­fest­ed it­self in the G20 meet­ing when they tasked the IMF in their re­cent sum­mit in Pitts­burgh to ex­plore op­tions for the fi­nan­cial sec­tor to pay for its own bail out. This opened the dis­cus­sion and we are pleased that these is­sues are be­ing dealt with. "Fi­nal­ly, this sub­ject can now be dis­cussed and moved on in a way not pos­si­ble be­fore," Hill­man said. "The truth is, tax­ing fi­nan­cial trans­ac­tions are nor­mal, com­mon­place and tech­ni­cal­ly sim­ple be­cause the mar­ket is elec­tron­ic and au­to­mat­ed, and a sim­ple change in com­put­er code can set aside the funds for col­lec­tion."